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Failure mode and effect analysis as a tool for risk management in construction
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Conference Paper · January 2013

DOI: 10.13140/RG.2.1.3935.4409

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 FAILURE MODE AND EFFECT ANALYSIS AS A
TOOL FOR RISK MANAGEMENT IN
CONSTRUCTION PLANNING
Farah A. Wehbe1 and Farook R. Hamzeh2

ABSTRACT
Construction projects are known for having an inherent risk affecting both schedule
and cost considerably. High levels of uncertainty and risk are typical for the
construction industry and are significantly manifested as project size and complexity
increase. Risk management practices are underutilized in the construction industry.
This paper focuses on the use of Failure Mode and Effect Analysis (FMEA) within
the Last Planner System (LPS) as a tool for risk management at the lookahead
planning level which connects master and phase scheduling to production planning.
FMEA has been widely used in the manufacturing industry to study potential failures
along with their impacts and suggest remedial measures. However, its use in
construction remains very limited especially at the planning level. The purpose of this
paper is to study the integration of FMEA into construction planning for projects
using the Last Planner System and its impact on workflow and project performance.
The paper introduces a planning process model with integrated risk management
employing FMEA at the lookahead planning level and combining aspects of first-run
studies. The model involves: risk identification, risk assessment and analysis, risk
monitoring, and contingency planning. The study contributes to the overall
understanding of construction planning by laying-out a framework for identifying
risks, mitigating those risks, and allocating contingencies.

KEY WORDS
Risk management, FMEA, lookahead planning, LPS, workflow.

INTRODUCTION
With a varying but omnipresent uncertainty, construction projects always witness a
challenge for completion within project objectives. Meeting schedule, cost, quality,
and safety requirements remain the basic performance measures to assess projects.
Construction planning is a crucial process that helps in achieving successful outcomes
in project management (Hamzeh et al., 2012). However, planning should account for
project related uncertainties to cater for the need of managing them early on. This is
where risk management practices need to be employed as an effective tool for
monitoring different risks in construction projects.
According to Akintoye and Macleod (1997), around 70% of construction
contractors and project managers do not have any formal risk management technique

1
Masters Student, Department of Civil and Environmental Engineering, American University of
Beirut, Riad El Solh-Beirut 1107 2020, Lebanon, faw01@mail.aub.edu
2
Assistant Professor, Department of Civil and Environmental Engineering, 406E Bechtel,
American University of Beirut, Riad El Solh-Beirut 1107 2020, Lebanon, fh35@aub.edu.lb

Production System Design 481

Farah A. Wehbe and Farook R. Hamzeh

used in their companies. Moreover 52% of projects are uncertain at the start of
construction with the majority finishing behind schedule and over budget (Howell,
2012). These alarming percentages underline the need for integrating risk
management in the construction industry as a basic step in planning to avoid failures.
In fact, improper planning and methodology rank among the leading causes of project
failures where 78% of projects in the MENA region fail due to poor planning (Skaik,
2010). Risk management tools vary and represent effective means to avoid planning
failures if carried out properly. This paper explains the use of Failure Mode and
Effect Analysis (FMEA) at the lookahead planning level for projects using the Last
Planner System (LPS). A process model is included to show the framework for
implementing FMEA in planning. Finally, advantages of using risk management
techniques to enhance construction planning and reduce failures are listed.

FMEA

LITERATURE REVIEW
Failure Mode and Effects Analysis (FMEA) is a risk management and planning
technique that can be used to identify and prioritize potential errors/failures within a
project/system/process and come up with possible solutions to avoid these errors.
Identification of potential problems is usually achieved by brainstorming and opinion-
sharing between experts within the operating field. Failure modes and/or errors are
then ranked or prioritized based on a Risk Priority Number (RPN) which is calculated
according to three main factors: severity of the risk, frequency of occurrence, and
probability of detection (Bahrami et al. 2012, Sawhney et al. 2010, Carbone &
Tippett, 2004).
FMEA was first implemented by the US army in 1949 and used for military
operations (Carbone & Tippett, 2004) and then proposed by NASA in 1963 for
reliability requirements, and has since then, been an indispensable technique for
system safety and reliability analysis (Bahrami et al., 2012). Nowadays, FMEA is
being used in various operational sectors. For example, it is an inseparable measure of
the ISO-9000 and QS-9000 quality certifications (Carbone & Tippett, 2004).
Moreover, slight alterations to the FMEA have been made in order to adjust it for
use in different domains where for instance, Bongiorno (2001) introduced a Design
FMEA (DFMEA) altered for specific use within design processes. Furthermore, an
altered Risk FMEA (RFMEA) has been introduced specifically for risk assessment.
Alterations included name amendments to the factors that produce the RPN where
“impact” replaced “severity” and “likelihood” replaced “occurrence”. Such
alterations were made so that these factors would better describe the actual situation
within the intended sector use. RFMEA introduced an additional risk indicator
(termed: risk score) which is calculated solely on impact and likelihood (Carbone &
Tippett, 2004). Fuzzy FMEA was suggested for use along with chain scheduling for a
more efficient project delivery (Razaque et al., 2012). Others have made use of
FMEA by introducing a new parameter termed Risk Assessment Value (RAV) in
order to help improve the reliability of the Lean system after it was critically
suspected to have a high failure probability (Sawhney et al., 2010).
Furthermore, FMEA is thought to be a useful tool that would help decision
makers eliminate doubt and become more confident about trying and implementing

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 Failure mode and effect analysis as a tool for risk management in construction planning

new construction innovations with mitigated risk potentials (Murphy et al., 2011).
Other suggestions included incorporating FMEA in every phase of the construction
industry as that would help reduce risks and avoid failure. The suggestion included all
stages of construction, yet a sample case study focused on excavation (Bahrami et al.,
2012).
FMEA is also found to be used in other wide ranges of the industry such as
aerospace, nuclear, and automotive manufacturers such as Peugeot and Citroen
(Ebeling, 2001). This has been substantiated in another automotive manufacturing
company case study, where evidence showed that there was “a reduced number of
prototypes needed to approve product components. In addition, there was a positive
influence on the product development decision-making process, evidenced by better
allocation of resources among projects at the program”. The results of the case study
can be exploited to encourage the use of FMEA not just in automotive manufacturers,
but in all industries that deal with new product development (NPD) (Segismundo &
Miguel, 2008).

THE LAST PLANNER SYSTEM

The Last Planner System (LPS) is a production planning and control system used on
construction projects. While planning is key to successful projects as it sets the goals
to be achieved and strategies to be followed, proper control is crucial to monitor and
adjust plans with actual work, re-plan, and learn from plan failures (Ballard, 1998). In
this context, LPS is different from traditional project management systems as it
involves production control (Ballard, 2000). The Last Planner System has 4 planning
levels: master scheduling, phase scheduling, look ahead planning, and weekly work
plan.
Starting with the master schedule at the level of the project, milestones are set and
work strategies are defined. Next, the phase schedule is developed using collaborative
planning. Reverse phase scheduling is performed and hand-offs are specified based
on previously defined milestones. Look ahead planning with constraints analysis is
then carried out to reach the weekly work plan for execution. Reliable plans are
generated and these are tracked by measuring PPC continuously, analyzing failures,
and learning from them (Hamzeh, 2009).
Implementing the Last Planner System turned out to be an efficient tool to
improve productivity, if properly implemented (Liu et al., 2011). However, research
area focused on improving work flow and shifted the interest to enhancing work flow
reliability. This is directly related to the dynamic nature of construction projects
where reliable planning mitigates for uncertainty and its resulting risks.

USE OF FMEA IN LPS

Despite its wide usage in many industries, FMEA remains underutilized in the
construction industry. The main reason behind that is the unawareness of construction
companies of the urgent need for risk management. An important feature of FMEA
relates to its proactive behavior (Bahrami et al., 2012). Rather than being reactive,
FMEA identifies failures before they occur, giving the needed time for avoiding them
when possible or looking for proper mitigation measures to reduce their effect. In this
paper, failures in construction projects are related to planning failures. These failures
are categorized into: (1) failure in completing task on plan, (2) failure due to lack or

Production System Design 483

Farah A. Wehbe and Farook R. Hamzeh

poor planning, and (3) failure due to intrinsic uncertainty. In planning, FMEA helps
in identifying critical and risky activities and assess their impact on project schedule.
Dealing with uncertainty in the planning phase can be also enhanced through the
use of the Last Planner System for production planning and control. The LPS reduces
uncertainty as it reduces workflow variability and increases reliability of plans. Based
on lean principles, the LPS improves reliability by allowing action at multiple
planning levels (Ballard and Hamzeh 2007).
The use of FMEA in LPS takes place at the look ahead planning level; it is carried
out in parallel with the constraints analysis. It allows for risk analysis and enhances
operation design as it provides for an additional means of filtering critical activities
and managing their associated risks. A detailed process model zooming on the use of
FMEA at this level will be presented in the following section.

PROCESS MODEL
The process model below portrays the integration of FMEA in the look ahead
planning. It shows the different steps involved at this planning level until activities
are moved to the weekly work plan for execution.

OVERVIEW OF LOOK AHEAD PLANNING

Look ahead planning connects master and phase scheduling to weekly work plan. It
covers activities that span 5 to 6 weeks ahead as uncertainty in further work makes
planning unreliable and meaningless. The time span for look ahead usually depends
on the reliability of forecasting activities and making sure these can be made ready.
Look ahead planning provides for detailed production planning and involves three
main tiers: breaking down activities into smaller tasks or operations, identifying and
removing potential constraints through constraints analysis, and designing operations
(Ballard et al. 2007, and Hamzeh 2009).
Look ahead planning has a vital role in controlling workflow in the production
system. It helps reducing uncertainty from tasks by removing constraints and thus
reducing variability. In look ahead planning, schedule, budget, and resources are
sized so as to meet each task requirement. Ready tasks are identified and moved for
execution during the weekly work plan. Finally, a workable backlog is created for the
upcoming execution week (Ballard et al. 2007, Hamzeh 2009).

MODEL DIAGRAM
The diagram in Figure 2 shows the look ahead planning process and the use of FMEA
technique for risk analysis at the operation design level. The legend depicted in
Figure 1 below was used to draw the model above. Each shape along with its
annotation is indicated.

Figure 1: Legend for process model

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 Failure mode and effect analysis as a tool for risk management in construction planning

Terminology and Detailed Processes

Looking at the diagram, several processes need to be defined to understand what each
of them comprises.
First Run Studies: these studies are essential for the purpose of operation design;
they are usually done 3 to 6 weeks prior to starting a new task. They portray in a
realistic manner the task to be performed as a trial and learning process in order to
find best practice and identify resources available or needed as well as the interaction
of the task with other operations. Processes that are categorized as new, critical, or
repetitive usually require first run studies to promote proactive scheduling and avoid
surprises. However, these studies are not limited to repetitive tasks but are advised for
any operation as they reduce impending variability and uncertainty associated with
construction operations (Ballard & Hamzeh, 2007). First run studies help in speeding
up the operation on field as crews are prepared and acquainted with the situation.
Areas of uncertainty can be identified and dealt with to find coping strategies. First
run studies also aid in controlling safety and quality in designing the operation early
on. Finally, first run studies help capture best practices and lessons learned to be
applied for future projects.
Constraints Analysis: this process is described as “Examine Prerequisites” in the
model. It helps identify ready tasks, constrained tasks, and those to be made ready.
Screening activities is performed to check the status of each based on its constraints
and decide whether to advance it or retard it. Activities are scanned relative to their
prerequisites such as information, space or sequence, resources, contractual, and
external conditions. Typical constraints related to information are for instance the
need for a RFI (Request For Information), a submittal approval, etc. Space and
sequence refer to the previous work being done or not and the access to the work area.
Resources are also examined to make sure that labor is available to perform the job,
needed equipment is available and functional, and on time materials delivery is
ensured. Contractual constraints could result from variation orders and being unaware
of specifications or code requirements. These are associated with flaws in contract
documents or inappropriate documents and could lead to claims, disputes, disruption
of work, etc. (Akintoye & Macleod, 1997) Finally, external conditions may be always
prevailing; these include weather changes, litigations, strikes, etc. 
Constraints Log: the constraints log encloses constrained tasks identified in look
ahead planning for constraints removal. If constraints are not removed, they are held
back in the constraints log until assigned. The status of constraints is controlled as
long as these are placed in this log (Hamzeh, 2009).
Risk Analysis: this represents the stage at which FMEA is employed. In order to
proceed with risk management, necessary data need to be collected. Experts’ data are
investigated, statistics are checked, and the company’s records are revised; all of
which are compiled for use. This risk management technique starts by identifying
potential risks associated with the operation at hand. Next, the different parameters
are computed. The probability of occurrence of the risk is determined, the severity or
impact of the risk is assessed, and the probability of detection is obtained. It is worth
mentioning that all these values are based on the collected data and may not be
perfectly accurate but should be representative for each operation. Also, detection of
the risk depends on the nature of that risk. Finally, the Risk Priority Number is

Production System Design 485

Figure 2: Process Model showing the integration of FMEA in look ahead planning
 Failure mode and effect analysis as a tool for risk management in construction planning

calculated to classify tasks. Highly critical tasks are recognized and risks associated
with them are managed through mitigation measures or contingency planning.
Hazard Analysis: job hazard analysis is a technique that aims at studying job
tasks to pinpoint potential hazards before occurring. A hazard is defined as “the
potential for harm…associated with a condition or activity that, if left uncontrolled,
can result in an injury or illness.” (OSHA, 2002) This analysis studies each job with
its related tasks and looks at the relationship between the worker, the tools used, the
environment where the task is performed, and the details of the operation itself. Once
hazards are identified, measures are taken to avoid them or reduce their effects to
tolerable risk levels. This will prevent undesirable and unplanned situations from
happening through treating the hazards as potential risks that may cause failure and
performing the FMEA procedure to monitor them.
Risk Mitigation Measures: these measures are used when the addressed risk is
inherent by nature and cannot be eliminated but simply reduced. Measures are taken
so as to control the potential impacts on the scheduled task. Mitigation measures
include the investigation of possible risk responses that could alleviate consequences
of the risk. Available options may be examined and the impact of each on cost,
schedule, and quality is evaluated. Moreover, allocation of buffers on certain tasks
may be a feasible solution that cuts down drawbacks.
Contingency Planning: contingency plans are used when risks can be released to
cater for their impacts. They may require a change of the current plan to acquire
certain conditions. Buffers are again used as contingency means when applicable.
Contingency plans induce additional costs but are compensated as they prevent much
higher budgets if the risks are not dealt with. These plans contain mitigation measures
and are present for use in case the identified risks occur. They take into consideration
the prevailing conditions and try to minimize or even eradicate risks.

MODEL LOGIC
Having explained the different processes incorporated in the model diagram, it is time
to show how all are integrated to allow this model to track a task from the moment it
enters look ahead until it is transferred to weekly work plan.
As a first step in look ahead planning, tasks are entered from phase schedule and
transferred there to be broken down into operations. The look ahead plan mainly
covers six weeks ahead of execution of the task. Breaking down of tasks is
undertaken to evaluate the constraints for each separately.
At this stage, the tasks enter the operation design for constraints analysis through
examining prerequisites. In parallel, risk analysis is carried out. These two processes
were described in detail in previous sections. After screening tasks and identifying
missing prerequisites, pulling is applied to make activities ready after removal of
constraints. It should be mentioned that the need for first run studies is inspected after
verifying prerequisites. Similarly, after performing the FMEA procedure with all its
steps, the status of each activity is checked to determine whether the risk is removed
or not. Once the risk is removed and the task is constraint-free, then the
corresponding task is moved to Task Ready. In case constraints are identified along
with related risks, the task is moved to the Constraint Log for constraints removal and
is held for monitoring its status and checking possible assignments later on.

Production System Design 487

Farah A. Wehbe and Farook R. Hamzeh

The constrained task is released from the constraint log if a make ready
commitment is undertaken, then the task can move forward. At this level, checking if
the constraints are removed leads to two paths. In case of successful removal, the task
is moved to Task Ready. Otherwise, the constraints are tested for removal during
execution week. If enough time buffer or resource buffer for instance are available,
then the task is assigned To be made ready during execution week. If this is not
possible, the task is sent for Review for next week. Such tasks are again included as
tasks on the look ahead plan and go through the entire cycle again.
Tasks that are advanced to the weekly work plan are those that are made ready for
assignments when scheduled. Those are Task Ready and tasks To be made ready
during execution week. It is good to note that a workable backlog is created in case
activities are finished earlier than expected or if assignments exceed capacity
(indicator of poor management). This backlog mainly comprises tasks that are ready
but not critical for potential completion.

LIMITATIONS OF FMEA
Despite its efficiency, the FMEA technique as any risk management tool has its
proper limitations. These are discussed briefly for better understanding.
One main concern in using FMEA is that results may sometimes be misleading.
Looking at the procedure followed, after identifying risks and computing needed
parameters, the Risk Priority Number (RPN) is found. Activities are then classified
based on it, and high RPN values define highly critical risks associated with the task.
However, having low RPN number does not exclude an activity from being very
critical (Bahrami et al., 2012).
Risks are hence quantified based on the RPN value without properly identifying
and exploring risk factors. This ambiguity may cause some risks to pass unseen and
thus result in poor management through wrong resource allocation and prioritization.
For instance, some tasks are being made ready before others that could be of more
importance or higher priority. Each of the risk factors leading to the RPN value must
be discussed. For example, some risks have low probability of detection while their
impact or severity on project planning is very high. Having said that, their calculated
RPN may turn out to be low and disregarded while they can affect workflow and
reliability of plans considerably.
Moreover, values for the different risk factors as probability of occurrence,
severity, and probability of detection are all estimated values that depend on the
behavior of the reference contact. Even if statistics, data from experts, and company’s
records are all documented and checked, these numbers are indefinitely prone to
mistakes through their subjective nature. They highly depend on the nature of the
people involved in this process. Being risk averse or risk taker is the controlling
feature.

CONTRIBUTIONS OF FMEA AS A RISK MANAGEMENT TOOL

Failure Mode and Effect Analysis (FMEA) is a useful tool that can be incorporated in
construction planning to provide means for risk management. Through its various
steps, this technique allows for a comprehensive risk management process.
First of all, risk identification is done using expert judgment, databases… Next,
risk analysis is performed through finding probabilities and calculating necessary

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 Failure mode and effect analysis as a tool for risk management in construction planning

values. After identifying and quantifying risks, a risk response must be generated.
This is accomplished through various means: (1) risk avoidance, i.e. the risk is
eliminated by avoiding it, (2) risk retention, i.e. the risk is accepted but a contingency
plan is devised, (3) risk transfer, i.e. the risk is transferred to the downstream or
upstream last planner, or (4) risk reduction, i.e. the risk is mitigated by reducing its
probability of occurrence (Kululanga and Kuotcha, 2010).
Employing FMEA at the planning level, early on during the project, is crucial for
maintaining a reliable workflow as it gives the chance to cater for risks before they
happen or draws a framework for managing those risks through different approaches.
Another important feature that could enhance construction workflow and make good
use of FMEA is by engaging in collaborative planning. Even when FMEA is used,
results are much more reliable if concerned parties are contacted to produce more
realistic plans that can be executed on time, in case of risk occurrence.
Hence, the FMEA lays down a framework for implementing risk management
practices and combine them with traditional constraints analysis done at the look
ahead plan to make schedules even more reliable and less prone to planning failures.

CONCLUSIONS AND FUTURE WORK

This paper focused on the use of FMEA at the look ahead planning level to show how
risk management can be monitored and controlled in construction planning. To study
the utility of integrating FMEA in the LPS, a simulation model can be developed
taking into account the skills of the last planners and the project environment. It is
important to mention that this paper dealt with risks identified during look ahead
planning i.e. specific constraints at the task level. These can be dealt with within 6
weeks prior to execution. Gross constraints which represent higher risks need to be
considered in the phase schedule and treated earlier on to avoid their shortcomings.
Making tasks ready is an essential goal of look ahead planning through screening
and pulling; different tasks are advanced to weekly work plan and considered as
ready for execution after dealing with corresponding constraints and associated risks.
However, the model did not account for new tasks that may occur suddenly during
the working week, without previous plan for them.
These unanticipated tasks have to be included in the updated look ahead plan and
dealt with differently given that no sufficient time is available to perform the
traditional analysis approaches and change plans accordingly. This is where
improvisation is needed to manage such activities. Actually, improvisation remains an
inseparable feature of planning given the high uncertainty of construction projects
which consequently demand high flexibility to overcome unforeseen events.
It is therefore important to know how to use improvisation and integrate it in
construction planning. Further work consists of adding the newly addressed type of
tasks in the model and catering for changes in plan through the use of improvisation.

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